Tackling fraudulent loans

Friday, April 10, 2009 | 2:06 a.m.

An unfortunate byproduct of a sour economy is the con artist who preys on people under financial duress. The scam artist makes off with thousands of dollars under the guise of lofty promises he knows he cannot deliver.

One common fraudulent activity these days involves mortgage loan modification schemes in which the distressed homeowner, often lured by misleading advertisements, pays a fee in hope of obtaining more affordable lending rates but winds up getting no such deal.

The Nevada attorney general’s office in March issued a consumer alert about these scams. On Monday, U.S. Attorney General Eric Holder announced a multi-agency federal effort to crack down on this fraudulent activity.

The announcement is a sign that the Obama administration is paying close attention not only to the crooks on Wall Street, but also to the con artists on Main Street. Holder said the FBI is investigating more than 2,100 mortgage fraud cases, up nearly 400 percent from five years ago.

The agencies participating in the battle against loan modification fraud also include the Housing and Urban Development and Treasury departments and the Federal Trade Commission. In the past, some multi-agency efforts to combat a problem have failed because of unnecessary turf battles.

We hope that will not be the case this time, especially given that the victims have been saddled with mortgage payments they cannot afford. Losing money to scam artists simply compounds the problems those homeowners face.

The fraud has become so pervasive that perpetrators are pretending to be affiliated with the administration’s Making Home Affordable program, which was announced last month to help as many as 9 million families restructure or refinance their mortgages. That is one reason why federal agencies charged with rooting out the fraud should continue to make that a high priority as long as the nation’s home foreclosure crisis persists.

Southern Nevadans who question the legitimacy of a loan modification program can do their part by contacting the state attorney general’s Consumer Protection Bureau at 486-3194.